The SEC approved amendments to NASD Rule 2340 (Customer Account Statements) to modify requirements regarding to the inclusion of per share estimated values for direct participation program (DPP) and unlisted real estate investment trust (REIT) securities on account statements, and to FINRA Rule 2310 (Direct Participation Programs) to make corresponding changes to the requirements to members’ participation in public offerings of DPP
KMBZ Radio – Kennyhertz Interviews Entrepreneurs Jason Grill, Ryan Maybee, Rafi Chaudry, and Travis Moore
Once a month, John Kennyhertz co-hosts the “Entrepreneur KC Show” on KMBZ Business Channel 1660 AM. This month’s show featured Ryan Maybee, co-founder and owner of J. Rieger & Co. Whiskey, as well as the historic Rieger Hotel Restaurant and Manifesto in the Crossroads District of downtown Kansas City. The last segment features the owners and brew masters from Torn Label Brewing Company. You can download the podcast at http://media.kmbz.com/a/101139620/entrepreneur-kc-radio-1-20-15.htm.
Kennyhertz Perry in partnership with J. Grill Media and KMBZ Radio, highlights entrepreneurs, startups, innovation and technologies that are changing lives on the Silicon Prairie and the legal issues these businesses and individual face daily. Tune in Thursdays between 1 and 2 pm on the KMBZ Business Channel 1660 AM.
Kennyhertz Perry Client Memorandum: Private Right of Action for Selling Unregistered Securities in Kansas
The Kansas Uniform Securities Act (K.S.A. 17-12a101 through 17-12a703) regulates the promotion of speculative securities to protect investors. Enforcement of the Act may be handled by the Kansas Securities Commissioner, but private actions are also authorized in certain circumstances.
A security is any proof of ownership or debt assigned a value and may be sold. Common types of securities are stocks, bonds, and options. The rules regarding “crowdfunding” as a security were relaxed after the JOBS (Jumpstart Our Business Startups) Act was passed in 2012. The JOBS Act allows everyone the ability to invest in startups, with investment caps based on one’s income.
As a general rule, it is unlawful to sell unregistered securities in Kansas. There are two exceptions to that rule:
- The security is a federal covered security, or
- The security, transaction, or offer is exempted from registration.
In early October 2014, the Federal Trade Commission (FTC) and Defendants Applied Marketing Sciences, LLC, Standard Registration Corporation, Worldwide Information Systems, Incorporated, and Liam O. Moran stipulated to an Order for Permanent Injunction and Monetary Judgment for violations of Section 5 of the FTC Act, 15 U.S.C. §45. The Complaint charged that the defendants participated in deceptive acts or practices in the advertising, marketing, promoting, offering for sale, or selling of prize promotions.
The FTC sued because the above-named defendants were running a sweepstakes in which consumers would receive personalized mailings advising that they had won a cash prize not more than $2 million, and that they needed to pay a twenty or thirty dollar fee to collect their prize. The consumers who paid the fee, mostly individuals over the age of 65, received nothing in return.
In an article entitled “Is a Real Estate Investment Trust Right for You,” Braden Perry discusses considerations investors should consider when evaluating a Real Estate Investment Trust (REIT) as part of their portfolio. The article discusses the advantages and disadvantages of REITs, including the ability to add real estate to a portfolio without the burden of purchasing and managing real estate versus the tax inefficiencies and potential high management fees. The article can be found at https://www.depositaccounts.com/blog/real-estate-investment-trust.html
Critical judgments and decisions in the investment process essential. Whether it’s stocks, bonds, real estate assets or any other financial commitment, the more research and preparation done on that investment, the better. Proper due diligence requires creativity coupled with common sense for any unnecessary surprises to be avoided, especially when it comes to money. For more information, please contact Braden Perry, who can assist with your investment due diligence.
If you are seeking to raise investment money for your company, remember that one of the best things you can do to protect yourself is disclosing as much information about your company as possible. That way, if things fall apart and your investors threaten to sue you for securities fraud or the government brings a regulatory action against your company, you can use your disclosures in your defense.
One of the best ways to do this is in a Private Placement Memorandum, or PPM for short. So what’s a PPM?
In an American Bar Association Student Lawyer publication, Braden Perry discusses the benefits to gathering information early for Character and Fitness Applications.
The key, said Perry, is to stay organized and focus on being consistent. “Consistency is often overlooked,” he said. “One of the things the Kansas Board of Law Examiners and other bar examiners do is look at your law school application, as well as any other applications they’re able to come across, and determine if there are inconsistencies. If there are, that’s a red flag.”
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Act) established the Consumer Financial Protection Bureau (CFPB) and authorizes it to supervise certain consumer financial services companies and large depository institutions and their affiliates for consumer protection purposes. The CFPB has been charged with implementing and examination for compliance with Federal consumer finance law.
The CFPB also has extensive authorities to not only investigate violations of federal consumer protection laws but also implement broad enforcement relief.
In an interview with Law360, former CFTC senior trial attorney and Kennyhertz Perry partner Braden Perry discussed the CFTC’s recent decision to take enforcement proceedings to administrative court. Citing lack of resources, the CFTC claims bringing enforcement actions in administrative courts would “allow the commission to develop its expertise and the powers given to it in 2010 by Dodd-Frank.” Perry described it as a “setback” for subjects of CFTC investigations and the lack of resources at a federally funded agency “shouldn’t be the reason for a policy change that eliminates what a defendant might see as a fair and full process.”
Braden Perry recently spoke with Law360 regarding the HFT spoofing indictment filed against Panther Energy Trading, LLC. The indictment, alleging Panther Energy designed and deployed algorithms that issued and canceled orders within milliseconds — faster than the blink of an eye but long enough to be detected by other automated trading programs that troll the markets. These actions “spoofed” the markets with enormous buy or sell orders that were canceled almost instantaneously, all to win illegal profits by manipulating the price of futures contracts. The action, according to Perry, protects high frequency traders and ensures integrity in the markets.
Braden Perry recently spoke at the Lend360 conference in New Orleans, discussing innovation and regulation in the peer-to-peer lending space. Topics included the evolving regulation and consumer protection issues facing peer-to-peer lenders. To view the Powerpoint, please visit: http://www.lend360.org/akdejbuehflridbkvx/ Kennyhertz Perry is a business and litigation law firm dedicated to serving regulated businesses and entrepreneurs. The
Discontent with the U.S. financial sector is on the rise (again), according to an article on the Service Insights Blog, after a recent American Enterprise Institute study revealed that government employees of regulators like the Consumer Financial Protection Bureau make more than double the salaries of the bankers they seek to regulate. Using data from